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Item 1A. Risk Factors

2026-05-29 compared with 2025-05-30 · 129 added, 67 removed, 197 unchanged (50% of the section changed)

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Our operations and financial results are subject to various risks and uncertainties, including but not limited to those described below, that could adversely affect our business, reputation, financial condition, results of operations, cash flows and the trading price of our common stock.

The disclosures in this section reflect our beliefs and opinions as to factors that could materially and adversely affect us in the future.

References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.

These risk factors do not identify all risks that we face;

there may be other risks and uncertainties we are not currently aware of or that we currently deem not to be material but that may become material in the future.

Risks Relating to Our Business

An inability to attract new customers, retain existing customers and sell additional services to customers could adversely impact our revenue and results of operations.

An inability to attract new customers, retain existing customers and sell services to customers could adversely impact our revenue and results of operations.

Our ability to maintain or increase our revenues and profit may be impacted by a number of factors, including our ability to attract new customers, retain existing customers and sell additional, comparable or, in the case of accounts with substandard margins, services with greater gross margins to our customers.

We may incur higher customer acquisition or retention costs as we seek to grow our customer base and expand our markets.

Moreover, to the extent we are unable to retain and sell additional services to existing customers, including as part of our initiative to address existing accounts that have substandard margins, our revenue and results of operations may decrease.

Moreover, to the extent we are unable to retain and sell services to existing customers, including as part of our initiative to address existing accounts that have substandard margins, our revenue and results of operations may decrease.

Our customer contracts typically have an average duration of over five years and, unless terminated, may be renewed or automatically extended on a month-to-month basis.

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Our goals for profitability and growth rely upon a number of assumptions, including our ability to make successful investments to grow and further develop our business and simplify our operations.

The risks and challenges we face in connection with our strategies include expanding our professional services capability, expanding in areas where we currently have a small presence and ensuring that our services remain competitive in a rapidly changing technological environment.

The risks and challenges we face in connection with our strategies include expanding our professional services capability, expanding in areas where we currently have a small presence, ensuring that our services remain competitive in a rapidly changing technological environment and streamlining our operations to optimize operational efficiency.

We may invest significantly in key strategic areas to drive long-term revenue growth and share gains.

These investments may adversely affect our near-term revenue growth and results of operations, and we cannot guarantee that they will ultimately be successful or produce any or all of the long-term benefits that we expect.

Additionally, emerging business and delivery models may unfavorably impact demand and profitability for our solutions or services.

In addition, our productivity initiatives are subject to known and unknown risks and uncertainties, including assumptions about cash expenditures, cost savings and the effectiveness of the Company’s reduced spend and risks affecting the timing and amount of workforce rebalancing charges, payments and related savings, and we may not fully achieve the expected operational expense savings and other benefits anticipated.

Additionally, emerging business and delivery models and use of new technologies, including agentic AI, may unfavorably impact demand and profitability for our solutions or services.

If we are unable to find, and maintain relationships with, partners to develop cutting-edge innovations in a highly competitive and rapidly evolving environment or are unable to implement and integrate such innovations with sufficient speed and versatility, we could fail in our ongoing efforts to maintain and increase our revenue and profit margins, achieve and sustain our targeted growth rates or improve our market share, operating margins and competitive position generally or in specific markets or services.

Our ability and decisions to return capital to shareholders depend on a variety of factors, including our ability to maintain and increase operating margins, cash flow generated from operations, our cash and investment balances, our net income and our overall liquidity position, as well as our debt balance, potential alternative uses of cash and anticipated future economic conditions and financial results.

Failure to carry out our capital allocation strategy may adversely impact shareholders’ perception of our business and the trading price of our common stock.

Our ability and decisions to return capital to stockholders depend on a variety of factors, including our ability to maintain and increase operating margins, cash flow generated from operations, our cash and investment balances, our net income and our overall liquidity position, as well as our debt balance, potential alternative uses of cash and anticipated future economic conditions and financial results.

Failure to carry out our capital allocation strategy may adversely impact stockholders’ perception of our business and the trading price of our common stock.

Competition in the markets in which we operate may adversely impact our results of operations.

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companies that use labor-based models and leverage talent pools primarily in lower-cost countries that have grown to offer a broad range of services with a worldwide presence;

and advisory-focused system integrators

specializing in bringing together disparate technology environments.

and advisory-focused system integrators specializing in bringing together disparate technology environments.

Our competitiveness is based on factors including quality of services, technical skills and capabilities, industry knowledge and experience, financial value, ability to innovate and respond to rapid and continuing changes in technology to serve the evolving needs of our customers, intellectual property and methods, contracting flexibility, and speed of execution.

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There can be no assurance that we will be able to develop and maintain such relationships, that the products and services will be available on the expected timelines or for anticipated prices, or that the financial terms of our relationships will remain affordable.

Among other things, such partners may in the future decide to compete with us, form exclusive or more favorable arrangements with our competitors or otherwise reduce our access to their products or services.

In addition, our alliance partners may also experience reduced demand for their technology, including as a result of changes in technology, which could reduce demand for our services and solutions.

Furthermore, certain of our customers may demand flexibility with regard to products or third-party service providers, and our contractual commitments to certain suppliers and partners may limit our ability to respond to those preferences.

Similarly, changes in customer preferences have affected, and may in the future continue to affect, our relationships with certain suppliers.

For example, as our relationship with IBM following the Spin-off continues to evolve, the amount of revenue generated by customers consuming IBM’s content through our service contracts has declined and may continue to decline, while having a limited impact on profitability.

If we are unable to predict or prepare for changes in the evolution of our relationships with our alliance partners and suppliers or otherwise grow our services content, our business and results of operations could be adversely affected.

If we are not able to maintain, or realize the expected benefits from, our relationships for any reason, we may be less competitive, and our ability to offer attractive services and solutions to address the needs and demands of our customers and our results of operations could be adversely affected.

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Any defective products or inadequate services received from suppliers or partners could reduce the reliability of our services and harm our reputation.

We may not be able to quickly replace or secure alternative products or suppliers, and we may be forced to absorb higher costs, reduce margins, or adjust our pricing.

Supply chain interruptions could harm our relationships with our customers, prevent us from acquiring new customers, harm our operational efficiency, financial performance, and reputation, and materially and adversely affect our business.

If we are not able to continue addressing and adapting to technological developments and trends that serve customer demands or drive efficiency, our growth plans, market share and financial performance could be negatively affected.

Our growth strategy depends in part on our ability to continue to develop and implement services and solutions that anticipate and respond to rapid and continuing changes in technology, offerings and industry standards to serve the evolving demands and needs of our customers.

If we fail to respond and adapt successfully to technology developments and trends and customer demands in a timely or cost-effective manner or fail to effectively leverage new technologies into our services and solutions, or if our competitors or other third parties respond to such challenges more quickly or successfully than we do, the demand for our services and solutions may diminish.

We have made and expect to continue to make investments in new technologies, including in AI and generative AI.

If we fail to respond and adapt successfully to technology developments and trends and customer demands in a timely or cost-effective manner or fail to effectively leverage new technologies into our services and solutions, or if our competitors, new entrants or other third parties respond to such challenges and/or adopt new technologies more quickly or successfully than we do, the demand for our services and solutions may diminish.

We have made and expect to continue to make investments in new technologies, including in AI, generative AI and agentic AI.

We sometimes dedicate a significant amount of resources to our development efforts before knowing to what extent our investments will result in services and solutions the market will accept.

The adoption and use of new technologies that are still in their early stages, such as AI and generative AI capabilities, involve significant risks and uncertainties.

In addition, investments in technology systems, capabilities, talent and resources may not deliver the benefits or perform as expected, may be replaced or

become obsolete more quickly than expected, or may reduce or replace some of our current services and offerings, which could result in operational difficulties or additional costs.

If we do not sufficiently invest in new technologies and adapt to industry developments, if we are unable to commercialize them in our services and solutions, evolve, expand and scale them effectively with sufficient speed and versatility, or if we do not make the right strategic investments to respond to these developments and successfully drive innovation, our results of operations and our ability to develop and maintain a competitive advantage and to execute on our growth strategy could be negatively affected.

The adoption and use of new technologies that are still in their early stages, such as AI, generative AI and agentic AI capabilities, involve significant

risks and uncertainties.

In addition, investments in technology systems, capabilities, talent and resources may not deliver the benefits or perform as expected, may be replaced or become obsolete more quickly than expected, or may reduce or replace some of our current services and offerings, which could result in operational difficulties or additional costs.

If we do not sufficiently invest in new technologies and adapt to industry developments, if we are unable to commercialize them in our services and solutions, evolve, expand and scale them effectively with sufficient speed and versatility, if we do not make the right strategic investments to respond to these developments and successfully drive innovation or if we do not adapt to these developments as effectively as our competition and/or new entrants to our industry, our results of operations and our ability to develop and maintain a competitive advantage and to execute on our growth strategy could be negatively affected.

If we are unable to attract and retain key personnel and other skilled employees, our business could be harmed.

If any of our key employees were to leave, we could face substantial difficulty in hiring qualified successors and could experience a loss in productivity while any successor obtains the necessary training and experience.

Although we have arrangements with some of our executive officers designed to promote retention, our employment relationships are generally at-will, and key employees may leave us.

We intend to continue to hire additional highly qualified personnel but may not be able to attract, assimilate or retain similarly qualified personnel in the future.

In particular, we have experienced senior management changes in the last year, and may continue to experience further changes, which may adversely impact our business as we transition those roles.

Such transitions can increase the risk of turnover among key personnel, require significant time and attention from management and the Board, hinder strategic planning, impact the effectiveness of our internal control environment and create uncertainty among investors, employees, customers and others regarding the Company’s future direction and performance.

Further, although we have arrangements with some of our executive officers designed to promote retention, our employment relationships are generally at-will, and key employees may leave us.

We intend to continue to hire highly qualified personnel with relevant skills and experience consistent with our current business strategy and offerings, but may not be able to attract, assimilate or retain similarly qualified personnel in the future.

Further, for certain executives where a significant portion of compensation is in the form of equity grants, our ability to attract, retain, and motivate such employees may be adversely affected by our recent stock price volatility or our ability to obtain stockholder approval to provide additional stock to our employees.

In addition, much of our future success depends on the continued service, availability and integrity of skilled employees, including technical, sales and staff resources.

Skilled and experienced personnel in the areas where we compete often are in high demand, and competition for their talents is often intense.

Our inability to attract and retain skilled employees could intensify the adverse impact of a shortage of critical skills necessary to serve our customers, keep pace with the rapid and continuous technological changes in our industry and further our growth strategy, including talent trained in AI, machine learning, software engineering and other market-leading skills and capabilities in new technologies.

Inability to attract and retain skilled employees could intensify the adverse impact of a shortage of critical skills necessary to serve our customers, keep pace with the rapid and continuous technological changes in our industry and further our growth strategy, including talent trained in different areas of AI, machine learning, software engineering and other market-leading skills and capabilities in new technologies.

Changing demographics and labor workforce trends also may result in a shortage of or insufficient knowledge and skills.

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If we are unable to hire or deploy employees with the needed skillsets or at scale to meet customer demand or if we are unable to adequately equip our employees with the skills needed, our business could be adversely affected and we may not be able to meet key objectives to further our growth strategy.

Alternatively, from time to time, as a result of technological developments or changes in demand, we may have more people than we need in certain skill sets, geographies or compensation levels.

In such cases, we have, and may in the future, rebalance our workforce, including reducing the rate of new hires and increasing involuntary terminations, which actions could negatively impact employee engagement and retention.

Additionally, we are currently taking, and may take in the future, actions intended to reduce operating costs, including actions to rebalance our workforce and reduce the rate of new hires.

From time to time, as a result of technological developments, changes in demand or an unanticipated decline in overall employee attrition, we can have more people than we need in certain skill sets, geographies or compensation levels.

As part of our ongoing efforts to further streamline operations, we are undertaking workforce rebalancing actions designed to optimize and support the Company’s financial and operational efficiency.

These actions, and any additional workforce actions taken in the future, could negatively impact our ability to attract, integrate, retain and motivate key employees, while also negatively impacting our corporate culture and employee engagement and retention.

Due to our global presence, our business and operations could be adversely impacted by economic, geopolitical, public health and other conditions.

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currencies, capital controls and adverse changes in trade relationships among those countries.

Further, international trade disputes could create uncertainty.

Tariffs, international trade sanctions and other controls on imports or exports resulting from these disputes could affect our ability to move goods and services across borders, or could impose added costs to those activities.

Further, international trade disputes have created and may continue to create volatility and uncertainty, due to geopolitical developments, concerns over changes in global trade policies, the imposition of tariffs, reactions from other nations and U.S.

government spending reductions.

Tariffs, including retaliatory tariffs, international trade sanctions and other controls on imports or exports resulting from these disputes could affect our ability to move goods and services across borders, or could impose added costs to those activities.

Measures taken to date by us to mitigate these impacts could be made less effective should trade sanctions or tariffs change.

In addition, any widespread outbreak of an illness, pandemic or other local or global health issue, natural disasters including those that could be related to climate change impacts, or uncertain political climates, international hostilities, geopolitical conflict or any terrorist activities, could adversely affect customer demand, our operations and supply chain, and our ability to source and deliver solutions to our customers.

In addition, any widespread outbreak of an illness, pandemic or other local or global health issue, natural disasters including those that could be related to climate change impacts, or uncertain political climates, international hostilities, geopolitical conflict, other military conflicts or any terrorist activities, could adversely affect customer demand, our operations and supply chain, and our ability to source and deliver solutions to our customers.

In the current macroeconomic environment, customers continue to balance short-term challenges and opportunities for transformation.

While some customers have accelerated their digital transformation and increased their expenditures, the short-term priorities of other customers continue to be focused on operational stability, flexibility and cash preservation, and as such, we may experience some disruptions in transactional performance.

Damage to our reputation could adversely impact our business.

Our reputation may be susceptible to damage by events such as significant disputes with customers, internal control deficiencies, delivery failures, cybersecurity incidents, government investigations or legal proceedings or actions of current or former customers, directors, employees, competitors, vendors, alliance partners or joint venture partners.

If we fail to gain a positive reputation as leader in our field, or if our brand image is tarnished by negative perceptions, our ability to attract and retain customers and talent could be impacted.

Volatile and uncertain global macroeconomic conditions have in the past and could in the future cause our customers to reduce, postpone, cancel or defer discretionary spending in enterprise technology and infrastructure, making it more difficult for us to accurately forecast customer demand and have available the right resources to profitably address such customer demand.

Further, macroeconomic or geopolitical conditions, including inflationary pressures, trade disputes and other challenges could result in financial difficulties for our customers, which have in the past and could in the future cause customers to delay payments to us, request modifications to their payment arrangements or default on their payment obligations to us.

Damage to our reputation and negative publicity adversely affects the Company and the price of our common stock.

Our reputation is susceptible to damage by events such as significant disputes with customers, internal control deficiencies, delivery failures, cybersecurity incidents, government investigations, including the SEC matter discussed below, or legal proceedings or actions of current or former customers, directors, employees, competitors, vendors, alliance partners or joint venture partners.

Negative publicity, including adverse media coverage, unfavorable commentary or reports published by short sellers and public statements or actions by stockholders (such as in connection with efforts by private law firms to solicit clients for securities or derivative litigation), significantly impact the price and volatility of the Company’s common stock, regardless of the accuracy of such commentary, reports or actions.

Negative publicity also impacts the terms under which some customers and suppliers are willing to continue to do business with the Company, affects the Company’s ability to attract and retain employees, and harms the Company’s relationships with investors, lenders and other stakeholders.

In addition, negative publicity or unfavorable perceptions make it more difficult for the Company and its employees to operate, resulting in reduced morale, a potential increase in employee turnover and difficulty attracting talent.

As a result, negative publicity adversely impacts the Company’s business, reputation and the price of its common stock.

If we are unable to accurately estimate the cost of services and the timeline for completion of contracts, the profitability of our contracts may be materially and adversely affected.

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We face a number of risks when pricing our contracts, as many of our projects entail the coordination of operations and workforces in multiple locations and utilizing workforces with different skill sets and competencies across geographically diverse service locations.

In addition, revenues from a small portion of our contracts are recognized using the cost-to-cost method, which requires estimates of total costs at completion, fees earned on the contract, or both.

In addition, revenues from a small portion of our contracts are recognized using the cost-to-cost method, which requires estimates of total costs at

completion, fees earned on the contract, or both.

This estimation process, particularly due to the technical nature of the services being performed and the long-term nature of certain contracts, is complex and involves significant judgment.

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Moreover, as inflation can increase both our labor and non-labor input costs, the profitability of our contracts could be negatively impacted if we are unable to adjust our pricing or costs to take inflation into account.

In addition, the accelerating pace at which new AI capabilities are being introduced, combined with increased regulatory uncertainty, specifically with regard to data sovereignty in Europe, has increased the complexity of certain long-term contracts.

This increased complexity, along with extended timelines in customer decision-making, have lengthened sales cycles, which have in the past and may in the future adversely impact our results.

Furthermore, if we fail to accurately estimate the effort, costs or time required to complete a contract, the profitability of our contracts may be materially and adversely affected.

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Such transactions can present significant challenges and risks, and there can be no assurances that we will identify or manage such transactions successfully or that strategic opportunities will be available to us on acceptable terms or at all.

The related risks include our failure to achieve strategic objectives, our failure to achieve anticipated revenue improvements and cost savings, our failure to retain key strategic relationships of acquired companies, our failure to retain key personnel and our assumption of liabilities related to litigation or other legal proceedings involving the businesses in such transactions, as well as our failure to close planned transactions.

We have faced, and may continue to face, delays in completing or failure to complete transactions.

Completing transactions is subject to delays, uncertainties and risks, including the risk that we may be unable to satisfy certain closing conditions, such as regulatory and financing conditions and the absence of material adverse changes to our business, and related litigation.

Post-closing, the related risks include our failure to achieve strategic objectives, our failure to achieve anticipated revenue improvements and cost savings, our failure to retain key strategic relationships of acquired companies, our failure to retain key personnel and our assumption of liabilities related to litigation or other legal proceedings involving the businesses in such transactions, as well as our failure to close planned transactions.

Such transactions may require us to secure financing, and our indebtedness may limit the availability of financing to us or the favorability of the terms of available financing.

If we do acquire other companies, we may not realize all the economic benefit from those acquisitions, which could cause an impairment of goodwill or intangible assets.

If we do acquire other companies, we may face challenges in our ability to operate or integrate the acquired company and we may not realize all the economic benefit from those acquisitions, which could cause an impairment of goodwill or intangible assets.

Realizing the desired results of a particular

transaction may depend upon, among other things, competition, market trends, regulatory developments and challenges, additional costs or investments and the action of suppliers or other third parties.

We could be adversely impacted by our business with foreign, state and local government customers.

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Some of our agreements with these customers are subject to periodic funding approval or other government budgetary issues.

Funding reductions, delays or work stoppages could adversely impact public sector demand for our services and can result in payment delays, payment reductions or contract terminations, any of which would have an adverse effect on our business, financial condition, results of operations and/or cash flows.

Recent funding reductions, delays or work stoppages have adversely impacted, and may continue to adversely impact, public sector demand for our services and can result in payment delays, payment reductions or contract terminations, any of which would have an adverse effect on our business, financial condition, results of operations and/or cash flows.

Also, government contracts are generally subject to extensive and evolving procurement regulations and tend to have additional requirements beyond commercial contracts and, for example, may contain provisions providing for higher liability limits for certain losses and non-performance.

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Additionally, we cannot be sure that our services and solutions, or the solutions of others that we offer to our customers, do not infringe on the intellectual property rights of third parties (including competitors as well as non-practicing holders of intellectual property assets), and these third parties could claim that we, our customers or parties indemnified by us are infringing upon their intellectual property rights.

As we expand our use of AI, there may be uncertainty regarding intellectual property ownership and license rights of AI algorithms and content generated by AI, and we may become subject to similar claims of infringement.

As we expand our use of AI, there may be uncertainty regarding intellectual property ownership and license rights of AI and content generated by AI, and we may become subject to similar claims of infringement.

In addition, we may be the target of aggressive and opportunistic enforcement of patents by third parties, including patent assertion entities and non-practicing entities.

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Even if we have an agreement providing for third parties to indemnify us for the foregoing claims, the indemnifying parties may be unwilling or unable to fulfill their contractual obligations.

The SEC matter and related events are ongoing, and the timing for their resolution and outcome cannot be predicted.

We continue to cooperate with the SEC Division of Enforcement’s investigation relating to the Company’s cash management practices, related disclosures, the efficacy of the Company’s internal control over financial reporting, and certain other matters.

This matter is ongoing and the Company cannot currently predict its final outcome.

Amid these circumstances, the Company is subject to a number of risks, including:

● declines in the price of the Company’s common stock or increased volatility;

● the Company has been and may continue to be subject to legal and regulatory claims, lawsuits (including stockholder lawsuits), investigations, proceedings and other matters, which are costly and time-consuming to defend, and may result in substantial financial and legal liability;

● the Company’s access to the capital and credit markets and the cost of such capital may be impacted, including as a result of actions taken by credit rating agencies;

● the Company experiences increased scrutiny from regulatory authorities, investors and other stakeholders, which could impact its business and result in additional investigations or regulatory actions;

● deterioration of the Company’s relationships with customers, suppliers and other business partners can lead to a loss of business, less favorable contractual terms or difficulty attracting new customers and partners;

● the availability of directors’ and officers’ liability insurance or other types of insurance may be costlier or more difficult to obtain in the future;

● the Company may be required to pay expenses, fines or damages, or agree to remedies, that could have an adverse impact on its business, results of operations, financial condition or liquidity.

Material weaknesses in the Company’s internal control over financial reporting have impacted the Company’s ability to maintain an effective system of internal control over financial reporting.

As previously disclosed, the Company has identified material weaknesses in its internal control over financial reporting.

See “Controls and Procedures” in Part II, Item 9A of this Annual Report on Form 10-K.

While the Company has developed a remediation plan, the material weaknesses cannot be considered remediated until the applicable remedial controls are implemented and operate for a sufficient period of time to allow management to conclude, through testing, that the remediation plan is implemented and the controls are operating effectively.

The Company may be unable to remediate these material weaknesses in a timely manner, which could cause investors to lose confidence in the accuracy and completeness of the Company’s financial reports and further impact the trading price of the Company’s common stock.

If we fail to establish and maintain effective internal controls, or if we identify additional material weaknesses, the accuracy of our financial statements may be adversely affected, and we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports and applicable stock exchange listing requirements.

Deficiencies in our internal controls could also cause investors to lose confidence in our reported financial information, which can have a negative effect on the trading price of the Company’s common stock.

We may be required to record impairment charges to future earnings if our goodwill or long-lived assets become impaired.

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and from errors, vulnerabilities and omissions in infrastructure, technology products, services and solutions that we use, as well as the risks associated with the number of customers, business partners, vendors, employees, contractors and other third parties working remotely.

Computer hackers and others routinely attempt to exploit and attack the security of technology products, services, systems and networks using a wide variety of methods, including ransomware or other malicious software and attempts to exploit vulnerabilities and flaws in hardware, software and infrastructure, technology products, services and solutions.

Computer hackers and others routinely attempt to exploit and attack the security of

technology products, services, systems and networks using a wide variety of methods, including ransomware or other malicious software, and attempts to exploit vulnerabilities and flaws in hardware, software and infrastructure, technology products, services and solutions.

Attacks also include social engineering to fraudulently induce customers, business partners, vendors, employees, contractors and other third parties to unwittingly disclose information, transfer funds or provide access to systems or data.

We are at risk of security breaches not only of our own infrastructure, networks and services, but also those of customers, business partners, vendors, employees, contractors and other third parties.

Cyber threats and attacks are increasing in number and sophistication and continually evolving, particularly with the expanding availability of AI and generative AI tools and technologies, making it more challenging to defend against certain threats, attacks and vulnerabilities that can persist undetected over extended periods of time.

Cyber threats and attacks are increasing in number and sophistication and continually evolving, particularly with the expanding availability of AI and generative and agentic AI tools and technologies, making it more challenging to defend against certain threats, attacks and vulnerabilities that can persist undetected over extended periods of time.

Our technology infrastructure, products, services and solutions, including other third-party systems and technologies that we use to deliver our services or maintain on behalf of our customers, may be used in critical Company, customer or third-party operations, and involve the storage, processing and transmission of sensitive data, including proprietary or confidential data, regulated data, personal information and intellectual property of employees, customers and others.

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The increasing number and sophistication of cyber threats, attacks and vulnerabilities, and the scale and complexity of our business and infrastructure, make it possible that certain threats, attacks or vulnerabilities will be undetected or unmitigated in time to prevent or minimize the impact on us or our customers.

Cybersecurity risk to us and our customers also depends on factors such as the actions, practices and investments of customers, business partners, vendors, employees, contractors and other third parties.

Cybersecurity risks to us and our customers also depend on factors such as the actions, practices and investments of customers, business partners, vendors, employees, contractors and other third parties.

Cybersecurity attacks or other catastrophic events resulting in disruptions to or failures in power, information technology, communication systems or other critical infrastructure could result in interruptions or delays to Company, customer or other third-party operations or services, financial loss, injury or death to persons or property, potential liability, and damage to brand and reputation.

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While we continue to monitor for, identify, investigate, respond to, remediate and develop plans to quickly recover from cybersecurity incidents, notwithstanding our efforts, we may experience a cybersecurity incident in the future that may have a material adverse impact on the Company.

As we are a global enterprise, the regulatory environment with regard to cybersecurity, data governance, privacy, AI and other issues to which we are subject is increasingly complex and will continue to impact our business, including through increased risk, increased compliance costs, and expanded or otherwise altered compliance obligations.

The enactment and expansion of cybersecurity, data governance, privacy, AI and other laws and regulations around the globe, including an increased focus on international data transfer mechanisms and supply chain management, the lack of harmonization of such laws and regulations, the increase in associated litigation and enforcement activity, the potential for damages, fines and penalties, and enacted or potential regulation of emerging and new technologies, such as AI and generative AI, will continue to result in increased compliance costs and increased risks.

Any additional costs and penalties associated with increased compliance, enforcement and risk reduction could make certain offerings less profitable or increase the difficulty of bringing certain offerings to market.

Risks Relating to Laws and Regulations

As we are a global enterprise, the regulatory environment with regard to cybersecurity, data governance, data sovereignty and localization requirements, privacy, AI and other issues to which we are subject is increasingly complex and will continue to impact our business, including through increased risk, increased compliance costs, and expanded or otherwise altered compliance obligations.

The enactment and expansion of cybersecurity, data governance (including data sovereignty), privacy, AI and other laws and regulations around the globe, including an increased focus on international data transfer mechanisms and supply chain management, the lack of harmonization of such laws and regulations, the increase in associated litigation and enforcement activity, the potential for damages, fines and penalties, and enacted or potential regulation of emerging and new technologies, such as AI and generative AI, will continue to result in increased compliance costs and increased risks.

Any additional costs and penalties associated with increased

compliance, enforcement and risk reduction could make certain offerings less profitable or increase the difficulty of bringing certain offerings to market.

Risks Relating to Legal Matters and Regulations

Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements, and violation of these regulations could harm our business.

We are subject to numerous, evolving, and sometimes conflicting, legal regimes on matters as diverse as anticorruption, import/export controls, content requirements, cybersecurity, data governance and privacy, trade restrictions, tariffs, taxation, sanctions, immigration, internal and disclosure control obligations, securities regulation, anti-competition, anti-money-laundering, wage-and-hour standards, employment and labor relations, environmental, human rights, machine learning and AI.

We are subject to numerous, evolving, and sometimes conflicting, legal regimes on matters as diverse as anticorruption, import/export controls, content requirements, cybersecurity, data governance, data sovereignty and localization requirements, privacy, trade restrictions, tariffs, taxation, sanctions, immigration, internal and disclosure control obligations, securities regulation, anti-competition restrictions, anti-money-laundering, wage-and-hour standards, employment and labor relations, environmental, human rights, machine learning and AI.

Further, we and the services we provide to customers may be impacted directly or indirectly by the development and enforcement of laws and regulations in the U.S.

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Compliance with diverse legal requirements is costly and time-consuming and requires significant resources.

New and changing laws can also adversely affect the Company’s business by limiting the Company’s ability to offer a

service or feature to customers, imposing changes to the design of the Company’s products and services, impacting customer demand for the Company’s products and services, and requiring changes to the Company’s supply chain and business.

New and changing laws can also adversely affect the Company’s business by limiting the Company’s ability to offer a service or feature to customers, imposing changes to the design of the Company’s products and services, impacting customer demand for the Company’s products and services, and requiring changes to the Company’s supply chain and business.

New and changing laws and regulations can also create uncertainty about how such laws and regulations will be interpreted and applied.

Violations of one or more of these regulations in the conduct of our business could result in significant fines and penalties, disgorgement of profits, enforcement actions or criminal sanctions against us and/or our employees, contractors or agents, prohibitions on doing business, unfavorable publicity and damage to our reputation.

Additionally, regulatory investigations can be expensive, disruptive and damaging.

Violations of these regulations in connection with the performance of our obligations to our customers also could result in liability for significant monetary damages and restrictions on our ability to effectively carry out our contractual obligations and thereby expose us to potential claims from our customers.

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We calculate and provide for taxes in each tax jurisdiction in which we operate.

Tax accounting often involves complex matters and requires our judgment to determine our worldwide provision for income taxes and other tax liabilities.

Our provision for income taxes and cash tax liability in the future could be adversely affected by numerous factors including, but not limited to, income before taxes being lower than anticipated in countries with lower statutory tax rates and higher than anticipated in countries with higher statutory tax rates, changes in the valuation of deferred tax assets and liabilities, and changes in tax laws, regulations, accounting principles or interpretations thereof, which could adversely impact our results of operations and financial condition in future periods.

The Organization for Economic Cooperation and Development (the “OECD”) continues to issue guidelines that are different, in some respects, than long-standing international tax principles.

Local country adoption of some or all of these rules may increase tax uncertainty and may adversely impact our income taxes.

Furthermore, local country, state, provincial or municipal taxation may also be subject to review and potential override by regional, federal, national or similar forms of government, which may also adversely impact our income taxes.

Tax accounting often involves complex matters and requires our judgment to determine our worldwide provision for income taxes and other

tax liabilities.

Our provision for income taxes and cash tax liability in the future could be adversely affected by numerous factors including, but not limited to, changes in the geographic mix of income, changes in the valuation of deferred tax assets and liabilities, and changes in tax laws, regulations, accounting principles or interpretations thereof, which could adversely impact our results of operations and financial condition in future periods.

The Organization for Economic Cooperation and Development (the “OECD”) continues to issue guidelines as part of its Base Erosion and Profit Shifting (“BEPS”) initiative and related international tax reform efforts.

These initiatives reflect evolving views on the alignment of taxable income with economic activity and may differ in certain respects from long-standing international tax principles.

Local country adoption and interpretation of these guidelines may increase tax uncertainty, result in inconsistent application among jurisdictions, and may adversely impact our effective tax rate, provision for income taxes and cash flows.

Our transfer pricing arrangements, which govern the pricing of intercompany transactions among our global operations, are subject to scrutiny by tax authorities and require the exercise of judgment to comply with applicable laws and OECD guidance.

Changes in international tax standards or differing interpretations by tax authorities could result in challenges to our intercompany pricing and adjustments to the allocation of income or expenses among jurisdictions.

Such adjustments could increase our tax liabilities, result in double taxation, and increase volatility in our effective tax rate and cash tax payments.

The resolution of transfer pricing matters may be time-consuming, costly, and subject to uncertain outcomes.

In addition, we are subject to periodic examinations of our domestic and foreign tax returns by taxing authorities in the jurisdictions in which we do business.

While we regularly assess the likelihood of adverse outcomes resulting from these examinations in order to determine the adequacy of our provision for income taxes, there can be no assurance that the outcomes from these examinations will not have an adverse effect on the Company’s provision for income taxes and cash flows.

While we regularly assess the likelihood of adverse outcomes resulting from these examinations and record tax reserves as appropriate, there can be no assurance that the outcomes of these examinations will not have an adverse effect on the effective tax rate, provision for income taxes and cash flows.

We are subject to legal proceedings and investigatory risks.

As a multinational company with customers and employees around the world, we are or may become involved as a party and/or may be subject to a variety of claims, demands, suits, investigations, tax matters and other proceedings that arise from time to time in the ordinary course of our business.

We are and may become involved as a party and/or may be subject to a variety of claims, demands, suits, investigations, tax matters and other proceedings that arise from time to time.

In addition, our former Parent may obtain, or may seek to obtain, indemnity from us for judgments against it relating to events that occurred prior to the Separation pursuant to agreements put in place in connection with the Separation.

The risks associated with known significant legal proceedings are described in more detail in Note 14 – Commitments and Contingencies in the financial statements elsewhere in this report.

We believe that we have adopted appropriate risk management and compliance programs.

Legal and compliance risks, however, will continue to exist, and additional legal proceedings and other contingencies, the outcome of which cannot be predicted with certainty, may arise from time to time.

The risks associated with known significant legal proceedings and regulatory investigations are described in more detail in Note 14 – Commitments and Contingencies in the consolidated financial statements included elsewhere in this report and herein under the heading “ The SEC matter and related events are ongoing, and the timing for their resolution and outcome cannot be predicted.

” Additional legal proceedings, regulatory investigations and other contingencies, the outcome of which cannot be predicted with certainty, may arise from time to time.

We could incur costs for regulated environmental matters.

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In addition, if we were to violate or become liable under these laws and regulations our reputation could be harmed, which could have a negative impact on demand for our products and services.

Expectations relating to environmental, social and governance initiatives and considerations could expose us to potential liabilities, increased costs and reputational harm.

Over the past few years, governments, regulators, investors, employees, customers and other stakeholders have focused on environmental, social and governance initiatives and considerations relating to businesses.

This includes matters relating to climate change and carbon emissions, human rights, diversity, equity and inclusion, responsible supply chain management, ethics, cybersecurity and privacy.

At the same time, a number of stakeholders, government entities, regulators and lawmakers have expressed contrary views and expectations, including the proposal or enactment of “anti-ESG” legislation, regulation, policies and enforcement priorities, which may result in scrutiny, reputational risk, lawsuits or market access restrictions.

Expectations relating to sustainability-related initiatives and considerations could expose us to potential liabilities, increased costs and reputational harm.

Over the past few years, certain government entities, regulators, lawmakers, investors, employees, customers and other stakeholders have focused on sustainability-related initiatives and considerations relating to businesses.

This includes matters relating to climate change and carbon emissions, human rights, workforce management, responsible supply chain management, ethics, cybersecurity and privacy.

At the same time, a number of other stakeholders, including government entities, regulators, lawmakers and investors have expressed contrary views and expectations, including the proposal, enactment or adoption of “anti-ESG” legislation, regulation, enforcement priorities and policies,

which may result in additional scrutiny, reputational risk, lawsuits or market access restrictions.

Conflicting regulations and requirements, and a lack of harmonization of legal and regulatory environments across the jurisdictions in which we operate, may create enhanced compliance risks and costs.

We have established and publicly announced certain goals, commitments and initiatives that reflect our current plans and aspirations on corporate citizenship matters, which are based on available data and estimates.

There are no guarantees that we will be able to achieve these goals and commitments.

The implementation of these goals, commitments and initiatives is subject to numerous risks, many of which are beyond our control, and in the future we may determine that further pursuit of them in light of changing circumstances is impracticable or inadvisable.

There are no guarantees that we will be able to achieve these goals, commitments or initiatives.

The implementation of programs designed to achieve these goals or commitments and support these initiatives is subject to numerous risks, many of which are beyond our control, and in the future we may determine that further pursuit of them in light of changing circumstances is impracticable or inadvisable.

Examples of such risks include but are not limited to:

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and our ability to manage geopolitical disruptions and natural disasters that could impact our employees, customers and businesses.

Our failure, or perceived failure, to achieve our corporate citizenship and other related goals and commitments, maintain our practices, adhere to our public statements, comply with existing and new laws and regulations or meet evolving and varied stakeholder expectations and standards could adversely affect our reputation, our financial condition and our ability to attract and retain customers and talent, and expose us to increased scrutiny from the investment community, enforcement authorities and others.

Our failure, or perceived failure, to achieve any goals or commitments related to our corporate citizenship, maintain our practices, adhere to our prior public statements regarding our aspirations or meet evolving and varied stakeholder expectations and standards could adversely affect our reputation, our financial condition and our ability to attract and retain customers and talent, and expose us to increased scrutiny from the investment community, enforcement authorities and others.

Risks Relating to Financing and Capital Markets Activities

A lowering or withdrawal of the ratings, outlook or watch assigned to our debt securities by rating agencies may increase our future borrowing costs, reduce our access to capital and adversely impact our financial performance.

Our credit ratings are based upon information furnished by us or obtained by a rating agency from its own sources and are subject to revision, suspension or withdrawal by one or more rating agencies at any time.

Rating agencies may place our ratings on negative outlook or credit watch, or take downgrade actions, due to a variety of factors including adverse changes in macroeconomic conditions, such as a global or regional recession, trade policy uncertainty (including tariff impositions or escalations), or broader credit market trends.

In addition, rating agencies may review the ratings assigned to us due to developments that are beyond our control, including potential new standards requiring the agencies to reassess rating practices and methodologies.

Rating agencies may further consider changes in our credit ratings based on changes in expectations about future profitability and cash flows even if short-term liquidity expectations are not negatively impacted.

Recently, we have experienced adverse actions or developments with respect to our credit ratings.

Any rating, outlook or watch assigned could be lowered or withdrawn entirely by a rating agency if, in that rating agency’s judgment, current or future circumstances relating to the basis of the rating, outlook or watch, such as adverse changes to our business, so warrant.

Any future lowering of our ratings, outlook or watch likely would make it more difficult or more expensive for us to refinance or obtain additional debt financing.

Moreover, a reduction in our rating to below certain levels could potentially cause certain customers to reduce or cease to do business with us, which would adversely impact our financial performance.

Any future lowering of our ratings, outlook or watch would make it more difficult or more expensive for us to refinance or obtain additional debt financing at competitive rates and impact the value and liquidity of our current debt.

Moreover, a reduction in our ratings to below certain levels could potentially impact our contracts and relationships with certain customers or vendors and lead them to reduce or cease to do business with us, or impact our ability to attract new customers, which would adversely impact our financial performance.

The commercial and credit environment may adversely affect our access to capital.

Our ability to issue debt or enter into other financing arrangements on acceptable terms could be adversely affected if there is a material decline in the demand for our services or in the solvency of our customers or suppliers or if there are other significantly unfavorable changes in economic conditions.

Our ability to issue debt or enter into other financing arrangements on acceptable terms can be adversely affected if there is a material decline in the demand for our services or in the solvency of our customers or suppliers or if there are other significantly unfavorable changes in economic conditions.

In addition, negative publicity or unfavorable perceptions and/or a lowering in our credit ratings, can harm our relationships with lenders and investors.

Volatility in the world financial markets could increase borrowing costs or affect our ability to access the capital markets.

These conditions may adversely affect our credit ratings.

These conditions and the other matters discussed in this Risk Factors section can adversely affect our credit ratings.

Our financial performance could be adversely impacted by changes in market liquidity conditions and by customer credit risk on receivables.

Our customer base includes many worldwide enterprises, from the world’s largest organizations and governments to smaller businesses, with a significant portion of our revenue coming from global customers across many sectors.

As a result, our financial performance is exposed to a wide variety of industry sector dynamics worldwide, including sudden shifts in regional or global economic activity.

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Additionally, if we become aware of information related to the creditworthiness of a major customer, or if future actual default rates on receivables in general differ from those currently anticipated, we may have to adjust our allowance for credit losses, which could affect our net income in the period the adjustments are made.

Further, we enter into arrangements with financial institutions to sell certain of our trade receivables from customers without recourse.

If we were to stop entering into these factoring arrangements or there are delays or failures in collecting trade receivables, our operating results, financial condition and cash flows could be adversely impacted.

If any of these financial institutions experience financial difficulties or are otherwise unable to honor the terms of our factoring arrangements, we may experience a material impact to our cash flows.

Our results of operations and financial condition could be negatively impacted by our pension plans.

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Our Amended and Restated Certificate of Incorporation provides that certain courts in the State of Delaware or the federal district courts of the United States will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our Amended and Restated Certificate of Incorporation provides, in all cases to the fullest extent permitted by law, unless we consent in writing to the selection of an alternative forum, the Court of Chancery located within the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on behalf of us, any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee or stockholder to us or our stockholders, any action asserting a claim arising pursuant to the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery located in the State of Delaware or any action asserting a claim governed by the internal affairs doctrine or any other action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL, or any action asserting a claim arising under the DGCL, our Amended and Restated Certificate of Incorporation or our Amended and Restated By-Laws.

However, if the Court of Chancery within the State of Delaware does not have jurisdiction, the action may be brought in the United States District Court for the District of Delaware.

The exclusive forum provision provides that it will not apply to claims arising under the Securities Act, the Exchange Act or other federal securities laws for which there is exclusive federal or concurrent federal and state jurisdiction.

Our Amended and Restated Certificate of Incorporation provides that unless we consent in writing to the selection of an alternative forum, the Court of Chancery located within the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on behalf of us, and to the fullest extent permitted by applicable law, any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee or stockholder to us or our stockholders, any action asserting a claim arising pursuant to the DGCL, our Amended and Restated Certificate of Incorporation or our Amended and Restated By-Laws or any action asserting a claim governed by the internal affairs doctrine.

However, if the Court of Chancery within the State of Delaware does not have jurisdiction, such action may be brought in another court in the State of Delaware, or if no court of the State of Delaware has jurisdiction, then in the United States District Court for the District of Delaware.

Unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

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What changed 10-K

Item 1A. Risk Factors